A Cautionary Tale from the Startup World | Hacker News Reader

A Cautionary Tale from the Startup World

randfishkin.com

92 pointsdshah19 comments

"The minute you start believing that you’re something special – that you’re the smartest, most talented guy in every room – is the minute things start to fall apart."

So true. Paranoia and humility are your closest friends.

Andy Grove had a point with the title of his book, Only The Paranoid Survive. That's what I admire most about Bill Gates, from the 1970s till maybe 2000 he managed to remain paranoid. (I say this as a compliment and something that I hope to emulate.) Most people with his level of success would become smug and over-confident. Like his successor, for instance.

If anyone knows the company he wrote about I'd be curious to know (whether it was the author's intention or not).

the article is interesting but without context it's kind of pointless. how do we know he is not making this up?

the company had supposedly revenue of 150mil with net loses of around 100mil. my guess is that this was some kind of online shop with very tiny profit margins.

EDIT: who would be buying an online shop? the only company I know of is Amazon, could this company in the article be http://techcrunch.com/2010/06/30/woot-amazon/ ?

I agree. I don't know why, cause I truly don't know enough about the company...but for some reason... I'm thinking Zappos.

The emphasis on culture reminded me of Zappos, but the ratio of Zappos funding to the acquisition price doesn't match the one from the story.

"the ratio of revenues, losses, final price and outcome are, to my knowledge, accurate"

The relative amounts are what matter. The story also now says he'll delete any comments on the blog speculating about the company in question.

Zappos sold for 15x the 60M investment, so seems unlikely.

Could it be about LiveSocial? Amazon was rumored to be investing in them..

It doesn't seem to be woot.

Their founder is also their CEO.

Pretty sure it's Woot. Coincidences?

1. See if you can find anything on the VCs who backed Woot. There's nothing on Crunchbase and nothing on Google. No-one is trumpeting it as a success, or even mentioning it in their (previous) portfolios.

2. Purchase price was reportedly $110m in cash - exact same number as in this post.

3. Post says firm was founded by close friends. He seems to live in Seattle, which is where Woot is/was based.

4. Current CEO of Woot, and presumably CEO at the time, has protected his tweets.

The article says they focused on "product quality". Given that Woot's often hawking items described as "the world's crappiest projector" and refurbished items, that would seem to rule them out.

Woot is based in Dallas, TX

This all sounds very familiar. Especially the bit about the conservative co-founder. When the hype is loudest, the voice of reason gets pushed to the side... and he who makes the biggest promises gets the biggest reward.

I think the lesson here is simpler: the company hit product-market fit, and assumed this would be the case forever. This wasn't true, of course. The founders hadn't optimized for this problem, they disagreed on what to do next, success got to their heads, and everything spiraled out of control.

It's always harder to follow-up on a success, especially a huge one, like what the company in this story had.

The only ones I can think of that ended up like this way have some notable differences - for example, managed to actually go public first, etc.

>Curiously, the CEO hired an exceptionally attractive young woman to be his executive assistant, despite questionable qualifications....

-- Where have I heard this story before?

The whole story seems like a big cliche.

what's wrong on having a hot admin?

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